Doing that also allows borrowers to consolidate payments if they are paying off several credit cards. Some balance transfer deals offer additional perks, she says, such as travel rewards, “hotel discounts, cash-back awards or free flights.”
But all that glitters is not gold. While the offers are alluring, they frequently come with a price. Take these tips for reading the fine print:
Be sure to comparison shop: Some cards offer zero percent interest on balance transfers for the first 15 months, while others offer them for as much as 21 months. So figure out how much time you need to pay off your debt before choosing one.
Look for deals with low fixed APRs: Once time’s up on zero percent balance transfer offers, normal interest rates kick in. So it’s important to not only look at the length of the deal, it’s also good to consider the APR that will kick in at the end of the introductory period. If you owe a balance, your monthly payments could skyrocket at the end of the zero percent balance offer.
Note the fee to transfer balances: Most companies charge borrowers a balance transfer fee, which could be equal to 3 percent of the total transferred or $5, whichever is higher, Rob Berger, a financial expert, writes in a piece at The Huffington Post: “If you were to transfer $10,000 to one of the cards in order to take advantage of the 21-month interest-free period, you’d have to pay $300 up front for the balance transfer fee.”
The bottom line, according to Khalfani-Cox, is to save. “And having one new account with a low or very competitive interest rate can not only save you big bucks, it can also help improve your credit rating,” she writes in the post.
So go work your plan!
(Lynette Holloway brought to you by Urban Partnership Bank)
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